President Obama Revokes Executive Order Prohibiting Government-Mandated PLAs

President Obama has issued an executive order revoking Pres. Bush's executive order that essentially prohibited government-mandated project labor agreements on federal and federally assisted projects. The new executive order establishes that "it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects." However, the order specifically states, "This order does not require an executive agency to use a project labor agreement on any construction project." Rather, the order provides that, in awarding a contract for a large-scale construction project, or obligating funds pursuant to such a contract, "executive agencies may, on a project-by-project basis, require the use of a project labor agreement." (Emphasis added.) A "large-scale construction project" is defined as one with a total cost to the federal government of $25 million or more. The order also (a) directs the FAR Council to amend the FAR as needed and (b) directs the Office of Management and Budget, in consultation with the Secretary of Labor and other officials, to provide the President with recommendations about "whether broader use of project labor agreements, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects." AGC has issued the following statement regarding the order: "Today's executive order has the unfortunate potential to limit contractors' ability to compete for projects at a time when the government is reporting that over one million construction workers have lost their jobs. Given that federal agencies have no demonstrated expertise in writing contracts that cover contractors and their employees, we strongly encourage officials to exercise the discretion this order provides and avoid government-mandated labor agreements." Click here for a copy of the order. AGC staff will continue to monitor and keep you informed of developments in this area.